The Bribery Act 2010 has been with us for a while now, but how many organisations have really considered the risks of prosecution?
Life is full of high-risk activities. Some we can do more about than others. Making sure we don’t unnecessarily expose ourselves to bribery and corruption is important not just legally, but also – even more importantly – because of the damage to business reputation and access to markets such allegations could lead to.
There are many aspects of the Bribery Act to consider but one area that often gets consideration is business hospitality.
Defining what is and isn’t appropriate hospitality is a minefield. One way of negotiating around these risks is to have an anti-bribery management system (ABMS) based on BS 10500:2011. This means there has to be a high-level policy and procedures – agreed and monitored by top management – to assess risks and control business ethics processes. This won’t necessarily prevent an unwanted event arising, but it puts the organisation in control, rather than being forced to react to something unexpected and nasty blindsiding it.
The need for a clear policy
Firstly, there should be a clear policy defined that covers giving and receiving hospitality. The obvious – but sometimes forgotten – point is why money is being spent on hospitality. There needs to be definite business benefit from it i.e. will the cost be recovered through increased sales and goodwill? The days of the junkets and jollies are over. This needs to be understood in advance by all staff.
Of course, with business development, there may be agreed budgets for marketing and giving hospitality to prospects. Again, this shouldn’t be left to individual discretion – the organisation needs to have a policy, budget and clear guidance on hospitality that can and cannot be given. For example, working lunches – within defined financial limits – might be permitted but giving lavish gifts wouldn’t be. Invitations to marketing and trade events – where many different parties are present – may be acceptable but, again, the cost involved and the impression it may give others need to be considered and agreed at a high level.
Sometimes, hospitality will be based on seniority, e.g. the chairman isn’t going to be expected to take the chairman of your largest customer to a fast food outlet. Equally, a very expensive outing to a top hotel is not likely to be acceptable either. In short, hospitality needs to be proportionate, budgeted and agreed at appropriate levels of management.
Furthermore, hospitality is dependent on circumstances. Hospitality offered during a tendering situation needs to be very carefully considered and is likely to be unacceptable. Offering hospitality to a customer or contractor whose employer forbids them from accepting any hospitality should never be attempted.
In short, there is no right answer to the complex question of hospitality. But having an ABMS gives a framework to consider, assess and control the risk of one lunch too many.
For more information on anti-bribery management systems and BS10500, I invite you to purchase my upcoming book ‘An Introduction to Anti-Bribery Management Systems’.
Currently available for pre-order, this book will help you understand how to implement an ABMS to the requirements of BS 10500.